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A Race to the Bottom in Customer Service: How Low Can You Go?

July 21, 2010

Updated August 3, 2011

All organizations, whether public, private or non-profit, like to espouse that they’re client or customer focused. Being “client centric” is what excites public servants, at least in my experience.

There’s a mammoth load of BS when it comes to what organizations purport they provide and what they actually deliver when it comes to serving clients and customers. The disconnect can be palpable.

The focus for this post is three examples of Canadian companies, one of which is American-owned.

What prompted this original post, and reinforced its update, are ongoing encounters I’ve had employees in my local grocery store. Loblaw is the largest grocer in Canada, selling food and a huge range of non-food items under a variety of its subsidiaries (e.g., Real Canadian Superstore, Loblaw, Atlantic Superstore and Independent). To protect the employees’ identities (you never know about the retribution of management), I won’t identify the store or which sections where I encountered them. But I’ve received earfuls of complaints on several occasions.

First off, given the bad morale in the company from what I was told I’m frankly amazed that these employees served me so well. I have a way of engaging people in frank conversation, listening non-judgementally and respectfully. All it took were a couple of questions and it came pouring out.

Loblaw in Ontario, a province of 13 million people, received a 97% strike vote late last yeyar from its unionized employees. I was shocked when I learned of this, both through the media and conversations at my local store. I recall how Loblaw was positioning itself a few years ago for the Walmart juggernaut, trembling how this behemoth would cream a much smaller Canadian rival in the food business. Loblaw has gone through steady retrenchment of downsizing employee numbers and changing the conditions of work. For example, through what I’ve read in the media and from what I’ve been told by several employees, Loblaw has introduced pay differentials within its subsidiaries. Employees who have transferred from Loblaw stores to Real Canadian Superstores, for example, experience significant pay and benefit reductions.

As a customer, the changes have been very evident over the past few years. Employees on the floor are scarce as hens’ teeth, as the expression goes. I can understand this type of model at my local Costco store, which I accept. That’s how their stores are set up as membership, discount retailer. But at a regular grocery store one would expect to see some evidence of human presence.

The employees to whom I’ve chatted over a period of time are decent people. I enjoy the cashiers and when I can find a live body on the floor I often engage in some chit chat. That these people retain any semblance of customer service in an oppressive management regime is a mystery to me. One of the standing jokes I’ve had for many months with the folks in my neighborhood store is how some dude with a pointy hat in Toronto, replete with MBA, sits in a little room in head office determining how grocery stores should be organized. The changes to store organization defy logic, with employees as confused as the customers. The practical knowledge of on-site employees is of no consequence or interest to senior management.

Just across the parking lot is an older format Walmart. I have no particular quarrel with this omnipresent corporation, except that my wife and I try to avoid it. It’s dirty, crowded and has a diminished employee complement which clearly hates working there. If you can generate a barely audible grunt from one of the employees you’re lucky. It wasn’t like that five years ago.

Then across the street there’s Canadian Tire, a national icon not quite as popular as the formerly Wendy’s-owned Tim Horton’s. To my American and other international readers, please forgive me but we Canadians (all 34 million strong) like to beat our chests from time to time. Canadian Tire, which sells everything from (you guessed it) tires to camping equipment to sports gear to coffee makers to groceries, actually has the best service of the three box stores. But don’t get excited. It’s still pretty lackluster. I get a rise out of talking to some retiree my age (56) who obviously is working there for want of more stimulating work, who points behind his head at the aisle for where I should aim. Thanks bud.

My point in sharing these anecdotes is that if you treat people as dunces and in a disrespectful way, then your customer service will reflect this attitude. You reap what you sow.

Loblaw management in Toronto–the pointy heads–may wish to revise its strategy on how the corporation wants to take on the Walmart juggernaut in Canada. My personal experience in shopping at Walmarts in Canada and the United States is that the service is essentially crap. Stores have mushroomed in size while the ratio of employees has apparently shrunk. Canadian Tire, to its credit, has a much higher ratio of employees on the floor; its challenge is to attain a consistently high level of employee customer service. Grunts and pointing fingers don’t count.

What matters in a volatile, ever-changing and unpredictable consumer marketplace is employee engagement through shared leadership, driven by senior management leadership that understands the inter-relationships of external competitive forces, customer service, employee aspirations, organized labor’s role (where relevant) and stakeholders (such as suppliers). When management gets beyond the bean counting and short-term quarterly profits, instead turning its view to the long-term, great things can happen. For now, it’s a race to the bottom among the box stores.

Finally, I wish the best to the folks at my local Loblaw store. Keep smiling; I, for one, appreciate your efforts.

When you get to the end of your rope, tie a knot and hang on.

– Franklin D. Roosevelt

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4 Comments leave one →
  1. July 22, 2010 10:39 pm

    It always amazes me that managers don’t recognize poor customer service within their organization and do something about it.

    For example, we have a Sears near our house. We don’t like shopping there, but it’s close and convenient. Never fails though. When you walk through the store, you see employees hanging out together, griping to each other about work. At best, they’re simply counting the minutes until their next break. They’re certainly not helping you to find what you’re looking for.

    When you want to pay, you have to seek out an open cash register and a salesperson to ring you up. Inevitably, the salesperson looks annoyed or bored. He/she makes no eye contact, doesn’t say “thank you” when handing you your purchase. All the niceties that should come with a paid transaction are forgotten because all focus is clearly on quitting time.

    By contrast, we have a Publix grocery store near our house. The store has plenty of helpful employees standing by. You can’t walk past a single one without them saying, “Hi, how are you today? Is there something I can help you find?”

    Just today, one of the employees saw me looking at a particular cut of meat. She asked me if I had found what I needed. I said yes I had today, but I noticed that often they were out of stock of this meat. She said, “I’ll look into that, but listen, next time you want that cut, just call me here at the store, Lori, and I’ll make it up special. That way it’ll be here waiting for you.” Does it get any better than that?

    • July 23, 2010 1:48 am

      Oh yeah, Sears. Talk about a decline into consumer oblivion.

      One chain that really impressed Sue and me when we travelled through California in 2008 is Trader Joe’s. My aunt in Orange County is a huge fan of this grocery chain. We found it a totally different grocery experience from what we’re used to in Canada, where employees smile and take an interest in customers.

      It’s amazing the transformation a store or workplace setting takes when people are smiling and feeling engaged in carrying out the corporate mission.

  2. Geoff permalink
    July 22, 2010 1:51 pm

    Jim – I have to warn you, you’re experience in the west end of Ottawa is an isolated one. And I suspect it has something to do with the local leadership of that particular store. Here in Orleans the employee morale and service levels are so bad at the Superstore that I will drive an extra five minutes to go to the WalMart – every. single. time. The Orleans Superstore offers quite possibly the worst service that I have ever experienced. If it was a one-off I wouldn’t mind, everyone has a bad day – but this place is remarkably consistent!

    I’ll offer another large Canadian vendor that has reliably turned me off with their customer service to such a degree that I make it a point to no longer spend money there: SportsChek. The latest for me was a pair of youth shorts that had a mislabeled price tag. When the clerk rang up my order, I pointed out that I had been charged the wrong price, short version – it was my fault. And so, they have lost a long-standing customer over a $9 difference that I somehow manufactured.

    The consistent situation that I see across all of these: very low staffing levels per square foot (let’s not forget to throw HBC into this pile) and/or staff made up primarily of low-wage, disinterested teens who are not getting the leadership they need to coach them to appropriate levels of proficiency in customer service.

    So now, whenever possible I shop at the smaller, locally owned outlets. I’ll pay the premium to support someone who really does care about their store, their product, and their clients.

    • July 22, 2010 3:18 pm

      Ha! Thanks Geoff. Yeah, customer service examples tend to elicit a spike in blood pressure. While I get bothered by the deterioration in service, as you note, I haven’t yet started frothing at the mouth like management guru Tom Peters. Maybe as I get older and more cranky I’ll replicate Peters.

      There’s nothing like good old competition to cleanse the marketplace. I welcome the arrival of Lowe Hardware to Canada (it has just started to enter our market), Marshalls, Target, etc. Walmart and especially Home Depot have become very sloppy in the past few years. If you recall my post about “Fred,” that was in Home Depot, a sad story in weakened customer service; it used to great in my local store.

      Of course one can point to leadership as the root cause for poor customer service. It must be frustrating for store managers and even franchise owners when the pointy heads in head office dictate new changes that impact negatively on service. I just got back from a run to Canadian Tire where I picked up a few items. I was talking to a guy about 60 in the tool section, and I innocently noted the recent policy change where receipts must be produced if you wish to return or exchange a product. I actually agreed with corporate management, which prompted a roll of the eyes and a wise crack from this fellow. Obviously he’s not terribly engaged with his work.

      Thanks for sharing your experiences…J

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